Town facing fiscal crisis

Audit of East Greenbush finds improprieties that have left the town millions in debt

By Alysia Santo

Published 10:48 pm, Tuesday, November 20, 2012

Photo: Lori Van Buren

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Jack Conway, former chair of the ethics board in East Greenbush, stands in front of his home Tuesday, Nov. 20, 2012 in Rensselaer, N.Y. Conway resigned from the ethics committee after the town board refused to include financial disclosure in the board's ethic's code. (Lori Van Buren / Times Union) less

Jack Conway, former chair of the ethics board in East Greenbush, stands in front of his home Tuesday, Nov. 20, 2012 in Rensselaer, N.Y. Conway resigned from the ethics committee after the town board refused to ... more

Photo: Lori Van Buren

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Jack Conway, former chair of the ethics board in East Greenbush, stands in front of his home Tuesday, Nov. 20, 2012 in Rensselaer, N.Y. Conway resigned from the ethics committee after the town board refused to include financial disclosure in the board's ethic's code. (Lori Van Buren / Times Union) less

Jack Conway, former chair of the ethics board in East Greenbush, stands in front of his home Tuesday, Nov. 20, 2012 in Rensselaer, N.Y. Conway resigned from the ethics committee after the town board refused to ... more

Photo: Lori Van Buren

Image 3 of 3

Jack Conway, former chair of the ethics board in East Greenbush, stands in front of his home Tuesday, Nov. 20, 2012 in Rensselaer, N.Y. Conway resigned from the ethics committee after the town board refused to include financial disclosure in the board's ethic's code. (Lori Van Buren / Times Union) less

Jack Conway, former chair of the ethics board in East Greenbush, stands in front of his home Tuesday, Nov. 20, 2012 in Rensselaer, N.Y. Conway resigned from the ethics committee after the town board refused to ... more

Photo: Lori Van Buren

Town facing fiscal crisis

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EAST GREENBUSH — Years of alleged fiscal mismanagement has left the town millions of dollars in debt and facing serious financial challenges, a state audit has concluded.

The comptroller's findings come just a month after the East Greenbush board of ethics chairman, Jack Conway, resigned in frustration after the Town Board stalled for two years on updating its ethics code, mostly, he says, because he wouldn't take out a clause requiring financial disclosure by government officials.

The comptroller's report examined internal operations from January 2010 to October 2011, and confirmed improprieties some whistle-blowing locals had reported, including questionable employment contracts and illegal payments to town officials, which were addressed in a special section dedicated to "taxpayer complaints."

The report also recommended the town hire an attorney to recoup more than $150,000 in stipends, sick leave incentives, and longevity payments improperly paid to town officials.

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Rick McCabe, the former town supervisor who was the recipient of some of these improper payments, said he just continued a practice that was in place before he started. "There was no intent there and no criminal activity," said McCabe.

McCabe is now working as a consultant with current Town Supervisor Keith Langley, who started in January, to attempt to improve the situation.

"Yes, we have debt, and yes, we're trying to fix it. It's a slow process and we'll get there," McCabe said.

Besides investigations sparked by local complainants, auditors found that access to the town's online banking system was lax. Employees had "excessive online banking privileges that were not applicable to their job duties," yet none of the transactions they reviewed were found to be illegal.

Then there's East Greenbush's own accounting books, which were off by millions of dollars. The "poor condition" of the records made answers hard to come by. Town Comptroller Jim Breig "could not provide an explanation as to why this had occurred," wrote auditors. "Town officials could not determine with any degree of certainty" the fund balances for the end of 2010 and most of 2011.

Breig, who started in 2010, said the discrepancies were "based on a misunderstanding of how our system works."

"It was really a learning curve on my part more than anything," said Breig.

Brian Butry, a spokesperson for the comptroller's office, said town officials were "in the dark" about their accounts, which eased them on their financial journey "from bad to worse."

"The town has a responsibility to accurately manage taxpayer dollars," said Butry.

Much of the audit's findings have been the subject of Freedom of Information Act requests and blog posts by a group of angry taxpayers who were fed up with their elected official's antics.

Dwight Jenkins, who under the act has requested hundreds of documents about the internal workings of East Greenbush, said he hopes the official nature of the report will force his local government to make changes. "It vindicates a lot of what we had been saying," Jenkins said. "There were people on that board who knew what was going on."

In September, the board passed a resolution to hire a public relations firm to "promote the progress being made in East Greenbush, and all that we have to offer."

The public relations proposal came on the heels of news reports about a decade of sewage leaking from the town's overburdened sewers into the Hudson, which caused the Department of Environmental Conservation to issue a moratorium on all town sewage hookups pending upgrades to the system.

Accusations of nepotism and patronage have mired the town in debate for years and were part of what led to the establishment of an ethics board in 2010. The board was tasked with upgrading the code of ethics, which hasn't changed since 1974.

Conway, the ethics board chairman, resigned at the end of October. He said he doubted the commitment of the board to changing rules which benefited them, and laid out his concerns in his Oct. 26 resignation letter. "[T]he elimination of financial disclosure was done for the convenience of sitting members of the Town Board who chose to place their own interest above that of town residents," Conway wrote. Board members also objected to "certain provisions in the nepotism section that affected the hiring of relatives of members of the Town Board."

About one-third of East Greenbush's employees are related to someone else on the payroll.

Sue Mangold, a Democratic Town Board member, said this statistic is not surprising since East Greenbush has only about 16,000 residents. "I don't think that's an unusual thing, and I think it's a positive thing that sons want to do what their father does," she said.

But Conway sees it differently. "If you want to know East Greenbush you have to realize the town government exists for the benefit of the town employees, and not for the benefit of the residents," he said. "Once I realized I hopped out, and now I can speak independently. What they are doing is not right and people need to know."